New York, NY (PRWEB) June 29, 2014
Over the five years to 2014, revenue for the Fabricated Structural Metal Manufacturing industry is expected to trend upward, bolstered by a revival in construction activity. Although industry revenue is anticipated to rise, like other cyclical industries, it was negatively impacted by the economic downturn. According to IBISWorld Industry Analyst Brandon Ruiz, “during the recession, construction activity plummeted due to weak economic conditions, but rebounded in light of resurgence in demand for construction activity, particularly nonresidential construction.” Consequently, over the five years to 2014, IBISWorld expects industry revenue to grow at an annualized rate of 1.4% to $31.6 billion, lifted by a 4.2% increase in 2014.
To compete against low-cost operators abroad, vertical integration is expected to become increasingly prominent over the five years to 2014. Industry operators in emerging markets, such as China, have lower labor expenses and are able to pass along savings to downstream operators in the form of lower selling prices. Despite this competitive advantage, industry operators have increasingly acquired upstream markets, such as steel mills, to improve cost controls and efficiency. Moreover, industry participants that vertically integrate their operations are better equipped to compete with operators abroad, particularly on price. This trend will likely be accelerated by volatile fluctuations in key inputs like steel.
“The Fabricated Structural Metal Manufacturing industry is anticipated to continue to grow over the five years to 2019, boosted by rising construction activity,” says Ruiz. Moreover, government funding for highways is projected to rise, further bolstering demand for the industry's products, particularly concrete reinforcing bars. Although industry revenue is anticipated to surge over the five-year period, industry operators are expected to face potential hurdles that will likely inhibit further growth. For example, the world price of steel is anticipated to increase over the five years to 2019, which will likely deter demand for the industry's products. Nevertheless, resurgence in demand for construction is expected to push industry revenue higher. Over the five years to 2019, industry revenue is expected to rise.
The Fabricated Structural Metal Product Manufacturing industry is characterized by low market share concentration. Many industry products are produced on a contractual basis and are required to meet unique specifications for the respective project, thereby limiting economies of scale for the industry. Nevertheless, the industry has been actively consolidating, and most major players benefit from vertical integration to lower input costs. Consequently, these companies are better able to offer their products at competitive prices, while maintaining favorable returns.
For more information, visit IBISWorld’s Fabricated Structural Metal Product Manufacturing in the US industry report page.
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IBISWorld industry Report Key Topics
The Fabricated Structural Metal Product Manufacturing industry fabricates structural metal products, such as assemblies of concrete reinforcing bars and fabricated bar joists.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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